South Korea's Central Bank Pushes Again for Commercial Bank Control of Won-Backed Stablecoins Amid Legislative Delays
South Korea's central bank has recommended establishing a banking consortium and creating an interagency regulatory body for stablecoin issuer approvals, drawing inspiration from the US GENIUS Act framework, local news outlets report.
The central bank of South Korea has allegedly intensified its efforts to ensure that traditional banking institutions retain control over the issuance of stablecoins pegged to the Korean won, cautioning legislative bodies that digital tokens issued by private entities could pose threats to monetary policy effectiveness and introduce fresh challenges related to foreign exchange management and overall financial system stability.
According to local media coverage, the Bank of Korea (BOK) submitted a comprehensive report to the National Assembly Strategy and Finance Committee in which it characterized won-pegged stablecoins as "currency-like substitutes" and emphasized that their deployment must take into consideration not merely the advantages for industry development but also implications for monetary policy implementation, foreign exchange market stability and broader financial system risks.
The central banking institution repeated earlier warnings that stablecoins present opportunities for circumventing foreign exchange controls, including mandatory advance reporting obligations, and maintained that permitting entities outside the banking sector to issue these digital assets independently would create tensions with Korea's established principles requiring the separation of banking activities and commercial enterprises.
The bank further noted that commercial banks, which operate under stringent capital requirements, governance frameworks and compliance obligations, should receive initial permission to issue stablecoins, with any subsequent extension of issuance rights to non-banking entities occurring incrementally only after thorough risk evaluations have been conducted.
This submission arrives while legislators continue deliberations over a postponed regulatory framework for stablecoins, with one of the central points of contention centering on determining which types of entities should qualify for permission to issue won-backed digital tokens and the degree of influence that banking institutions should exercise within any organization authorized to issue such assets.
Cointelegraph reached out to the Bank of Korea for more information, but had not received a response by publication.
Central bank proposes safeguards against stablecoin risks
According to reports, the banking authority stated that programmable stablecoins possess the potential to facilitate innovation within the digital asset ecosystem and serve as effective payment instruments, while simultaneously proposing structural protective measures, including a consortium framework centered around banking institutions and the establishment of a statutory interagency policy coordination body capable of harmonizing approval processes and supervisory oversight across multiple regulatory authorities.
The BOK allegedly referenced the United States' GENIUS Act regulatory structure as an illustration of multi-agency supervisory coordination that brings together the Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation in collaborative oversight.
Debate stalls broader stablecoin framework
The position articulated in the BOK's recent report mirrors its previous cautionary statements, which maintain that banking institutions should spearhead the initial deployment of stablecoin issuance capabilities given their existing compliance with rigorous regulatory standards. Nevertheless, this strategy has encountered resistance from participants in the cryptocurrency industry and certain members of the legislative body.
Sangmin Seo, the chair of the Kaia DLT Foundation, previously told Cointelegraph that the argument for banks leading the stablecoin rollout lacks a "logical foundation." Seo said that establishing clearer rules for issuers can minimize risks.
On Nov. 25, 2025, regulators remained split over whether banks should hold a majority stake in stablecoin issuers, leading to a delay in legislation initially expected in October.
On Dec. 15, lawmakers said they expected a resolution in January. However, a final legislative timeline has yet to be announced.